35 slides from Dine Brands Global, Inc. Common Stock's investor presentation, Sep 8, 2015
Slide 1: Management Presentation September 2015
Management Presentation September 2015
Slide 2: Disclaimer
Disclaimer Forward-Looking Information: Statements contained in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by words such as "may," "will," "should," "expect,
Slide 3: Overview of DineEquity, Inc.
Overview of DineEquity, Inc.
Slide 4: 99% franchised business model generates strong free cash flow with reduced volatility
99% franchised business model generates strong free cash flow with reduced volatility Asset-lite franchise business model drives strong, consistent cash flow generation DineEquity has reduced its total debt by over $1 billion since the end of 2007 (2) Applebee’s and IHOP are two iconic brands with #
Slide 5: Franchise revenue sources for Applebee's and IHOP
5 Royalties Approx. 4.5% Sale of Pancake / Waffle Dry-Mix Franchise Fees (1) Financing Revenues (2) Rental Revenues (3) Royalties Approx. 4.0% Franchise Fees IHOP revenue sources exclude advertising fund contributions from franchisees, which are recognized as revenue and a corresponding expense of f
Slide 6: Our Strategy to Drive Shareholder Value
Our Strategy to Drive Shareholder Value
Slide 7: DineEquity's Value Creation Strategy
Maximize the Business Innovate and Evolve Strong Brands Manage Costs 1 Facilitate Franchisee Development 2 3 DineEquity is focused on generating strong free cash flow and returning a substantial portion of it to shareholders. DineEquity’s Value Creation Strategy Drive Strong Free Cash Flow Return it
Slide 8: Innovate and Evolve Strong Brands
8 Effective Advertising & Media Digital and Social Marketing Operational Excellence Consumer Delight Global Development by Franchisees Ongoing Commitment to Long-term Brand Building Innovate and Evolve Strong Brands 1 Remodel Programs Menu Innovation
Slide 9: Food and Menu Innovation at IHOP
9 Food and Menu Innovation at IHOP Innovate and Evolve Strong Brands 1
Slide 10: Food and Menu Innovation at a Glance (IHOP)
10 Food and Menu Innovation at a Glance Innovate and Evolve Strong Brands 1 The new menu cover reinforces that our food is made fresh-to-order Use of photographs with more natural styling, texture, and realism Improved the flow of the menu, opening with our world-famous pancakes Create Your Own sect
Slide 11: Food and Menu Innovation at Applebee's
11 Food and Menu Innovation at Applebee’s Innovate and Evolve Strong Brands 1
Slide 12: Food and Menu Innovation at a Glance (Applebee's)
12 Food and Menu Innovation at a Glance Innovate and Evolve Strong Brands 1 The new menu cover has a more contemporary look and feel Introduced an enticing platform of handhelds and expanded our appetizers offering New images provide an up-to-date representation of Applebee’s Greater focus on signat
Slide 13: Social Media Impact at Both Brands
(1)Be The Change Revolutions: “Applebee’s Social Media By the Numbers, 2014 Annual Report.” (2)MRM//McCann: IHOP Front Lines Report. Competitive set includes: Denny’s, Waffle House, Cracker Barrel, Panera and Bob Evans. Data from October 2014 to January 2015. (3)MRM//McCann: Social Benchmarking Tool
Slide 14: Same-Restaurant Sales Performance
Same-Restaurant Sales Performance IHOP System-wide Same-Restaurant Sales Applebee’s System-wide Same-Restaurant Sales (1)Fiscal 2015 same-restaurant sales performance guidance as of July 29, 2015. Source: Company’s fiscal 2014 Form 10-K and Company’s press releases. Innovate and Evolve Strong Brands
Slide 15: Investing in Talent and Systems to Drive Global Development
(1)As of December 31, 2014, DineEquity’s company restaurant operations segment consisted of 23 Applebee's company-operated restaurants and 11 IHOP company-operated restaurants. Source: Company’s fiscal 2014 Form 10-K IHOP’s restaurant base has grown by approximately 23% since the end of 2007 During
Slide 16: Strong Presence Across All States
Strong Presence Across All 50 States Source: Company’s fiscal 2014 Form 10-K. Data as of December 31, 2014. Applebee’s and IHOP are powerful brands with a strong national presence across the U.S. 5 4 19 1 4 1 20 7 9 3 5 8 19 21 7 2 3 5 9 12 12 15 15 30 22 37 32 21 32 39 24 32 23 28 28 22 30 150 79 5
Slide 17: Consolidation of Operations
17 This was a strategic decision to consolidate many core restaurant and franchisee support functions into the Glendale, CA location The move is intended to promote the organization’s speed to market and cross-functional collaboration The plan positions DineEquity to be more nimble and is designed t
Slide 18: Estimated Costs Associated with the Consolidation
18 DineEquity estimates that it will incur costs related to the exit of the Kansas City, MO facility as presented in the table below. The Company estimates that substantially all of these costs will result in future cash expenditures. DineEquity does not anticipate that the consolidation of operatio
Slide 19: Track Record of Minimizing Expenses: G&A
(1) Comprised of actual IHOP G&A expenses plus pro forma Applebee’s G&A expenses as disclosed in the Company’s 2007 Form 10-K, less certain one-time costs primarily related to additional stock-based compensation triggered by the Applebee’s acquisition and severance costs for employees terminated in
Slide 20: Track Record of Minimizing Expenses: Corporate Interest Expense
(1) We incurred a substantial amount of indebtedness to finance the Applebee's acquisition. As a result, our interest expense increased significantly from that reported in the prior year. (2) Performance guidance as of July 29, 2015 Source: Company Form 10-K filings and press releases. Track Record
Slide 21: 99% Franchised System Requires Minor Capital Expenditures
(1) Performance guidance as of July 29, 2015 Source: Company Form 10-K filings and press releases. (in millions) Capital Expenditures (2009 - 2014) 99% Franchised System Requires Minor Capital Expenditures DineEquity is prudently investing in technology and future restaurant prototyping to drive gro
Slide 22: Capital Allocation
CAPITAL ALLOCATION dineEquity’ 201s baat ne. Alva ean
Slide 23: New Capital Allocation Strategy
New Capital Allocation Strategy Board authorized a meaningful increase in the quarterly cash dividend in Q4 2014 Quarterly $0.75 $0.875 Annual $3.00 dividend $3.50 The Board also replenished our share repurchase authorization to $100 million Meaningful 17% increase in the quarterly cash dividend tha
Slide 24: Significant Achievements Over the Last Seven Years
Significant Achievements Over the Last Seven Years
Slide 25: Successful Execution of our Strategy has Yielded Positive Results
Delivered on What We Promised Reduced G&A by nearly $50 million between 2007 and 2014 Continuing to drive growth from our existing brands DineEquity became 99% franchised in 2012 Completed the refinancing of our long-term debt in 2014 to a lower fixed rate Reduced total debt by over $1 billion since
Slide 26: Our Brands Continue to Lead Their Respective Categories
Our Brands Continue to Lead Their Respective Categories Family Dining: Domestic System-wide Sales Casual Dining: Domestic System-wide Sales Source: Nation’s Restaurant News, “Top 100,” June 15, 2015 (Applebee’s rank based on 2014 U.S. system-wide sales in the casual dining category; IHOP rank based
Slide 27: Both Brands have Outpaced Peer Development
Both Brands have Outpaced Peer Development Family Dining: Global Gross Development 2009-2014 Casual Dining: Global Gross Development 2009-2014 (1)Average of IHOP’s competitive set, defined as Denny’s, Cracker Barrel, and Bob Evans (2)Average of Applebee’s competitive set, defined as Chili’s, Olive G
Slide 28: Fiscal 2014 Recap
FISCAL 2014 RECAP © 2015 DineEquity, Inc. All rights reserved.
Slide 29: 2014 Was a Banner Year for DineEquity
2014 Was a Banner Year for DineEquity Refinanced our long-term debt to a significantly lower, fixed interest rate of 4.277%, reducing future cash interest payments by approximately $34 million on an annualized, pre-tax basis. Announced a new capital allocation strategy, increasing the quarterly divi
Slide 30: Solid Performance Continued in 2015
Solid Performance Continued in 2015 30 Second Quarter 2015 Highlights Achieved 32% growth in second-quarter adjusted earnings per diluted share(1) to $1.53 and a 40% increase in GAAP earnings per diluted share to $1.40 compared to the same period of 2014. Total revenues increased by 7% to approximat
Slide 31: Stock Performance Driven by Significant Achievements and Solid Results
Stock Performance Driven by Significant Achievements and Solid Results
Slide 32: Comparison of Five-Year Cumulative Total Return
32 Comparison of Five-Year Cumulative Total Return DineEquity, S&P 500, & the Value Line Restaurants Index Performance Results Through 12/31/14 Assumes $100 invested at the close of trading on 12/31/2009 in DineEquity, Inc. common stock, Standard & Poor’s 500, and the Value Line Restaurants Index. *
Slide 33: Positioned for Future Success
Positioned for Future Success
Slide 34: Building on our Achievements for Future Success
Building on our Achievements for Future Success Focused on key strategic priorities to drive long-term growth 34 Continue to drive growth from our existing brands International development and brand building Potentially broaden our portfolio through a acquisition of a complimentary fast casual conce
Slide 35: Management Presentation September 2015
Management Presentation September 2015